What percentage of your portfolio is tax deferred

[Gumby]

Prompted by this post in the discussion about Roth conversion strategies http://www.early-retirement.org/for...h-conversion-amount-100326-3.html#post2313910, it would be interesting to see how much of your stash is tax deferred -- IRA/401k/403b/457 - as that may drive some important decisions about post retirement strategies. Do you see your allocation as problem? And, if yes, do you have a plan to "tax diversify"?

I'll start - Our current breakdown is approximately 73% tax deferred, 7% tax free (Roth) and 20% taxable. While I'm happy to have saved a bundle in taxes while I was making those contributions, I'm not pleased with the gymnastics of getting the money out to maximize the tax arbitrage.

 

[GrayHare]

tIRA not Roth, right?

 

[Gumby]

tIRA not Roth, right?

Yes. I'll try to edit the poll title.

 

[CardsFan]

About 67% in tIRA. Working on conversions (in the 12% bracket), but don't expect to move the needle much (no need to discuss in detail here, with the other discussions on going). There will be a large tax torpedo. Into the 22-25% bracket at RMD age, higher as we get older or one passes.

The bottom line is, we won the game.

 

[braumeister]

About 31% in TIRA, thanks to a lot of Roth conversion over the years. It was painful at times, but worthwhile. There was a one time special deal for a conversion in 2010. You could pay the taxes on it over the next two years. I took full advantage of that, and although it hurt to pay so much tax those two years, I'm glad I did it.

 

[steelyman]

I’m at ~50% tax-deferred in my retirement portfolio, all in a single IRA at Fidelity rolled over from a 403(b).

[ADDED] I didn’t realize this was a poll but discovered you CAN participate in and see poll results from the mobile app. Nice.

 

[RunningBum]

About 31% in TIRA, thanks to a lot of Roth conversion over the years. It was painful at times, but worthwhile. There was a one time special deal for a conversion in 2010. You could pay the taxes on it over the next two years. I took full advantage of that, and although it hurt to pay so much tax those two years, I'm glad I did it.

I really wish I'd have done that then. I had some reasoning for not doing it, but I don't think it was well thought out.

 

[Ronstar]

I'm right at 80%, but I have an annuity that is annualized and making % deferred reductions monthly, so I voted 70-80%

 

[mattbaxx]

81% tax deferred, 18% tax free, 1% taxable. Never got into the ROTH conversions for a variety of reasons, and comfortable with the fact that we'll start drawing down some IRA money at some point and paying taxes on it. The IRA was a blessing when I learned about it in 1985 and it has served us well.

 

[Plantman]

I'm right at 30 percent so I didn't vote.

 

[Jerry1]

83% tIRA, 14% after tax, 3% ROTH/HSA

I plan on converting up to the 12% bracket and possibly into the 22% bracket until the current law expires where my expectation is that the rates will revert to their previous levels. As we get closer to the expiration date, I'll know better how much I'm willing to convert into the 22% bracket.

 

[Dtail]

86% TIRA, 11% Taxable, 3% Roth
DGF will be converting to the top of the 12% bracket.
I need to keep my MAGI low for the ACA, so will be using a mix of Roth conversions, TIRA and Taxable spend down until 65 y.o.
Then converting hopefully much more to Roth until RMD's.

 

[The Cosmic Avenger]

80.5% tax-deferred, which I'm concerned is a bit high. I might have to wait until 55 to FIRE, otherwise all we'll have to carry us to 59.5 is the 19.5% (which is about 11% Roth and 8.5% taxable), and the Roth was what I wanted to save for last if I leave anything after I die.

 

[RobbieB]

One quarter, 25%. Already started MRD's six years early.

 

[jabbahop]

About 70% taxable, 30% tax deferred. No tax free

 

[SunBlueSky]

60% tax-deferred. Thinking about doing conversions, but I haven't done an analysis to see if I benefit more by keeping income low to get ACA subsidies (beginning in 2020).

 

[corn18]

Another good question to ask is how much of your taxable account is cap gains?

 

[scrabbler1]

I'm at a hair over 40% in my (rollover) tIRA. It is only that high because it has grown more quickly than my taxable account after I cashed out the company stock in my old 401k 11 years ago, instantly moving the tax-deferred/taxable split from 62/38 to 29/71. The 29% in the rollover tIRA very gradually rose through the 30s from 2009 through earlier this year, when it pierced the 40% mark.

 

[Souschef]

In a sense. I should not complain. I rolled over my 401K into a mutual fund in 2009. Today it is worth 5X the original value, and the RMD on it is hefty.

 

[Samething]

62% tIRA, no Roth, 40% of taxable is CG, 19% of investable NW is CD/MMA with anticipated home purchase spring 2020. Cobra till November 2020 then managing MAGI for ACA.

 

[pb4uski]

53%.... about the same as when I retired in early 2012.

However, as a result of Roth conversions, tax-free has increased from 3% to 25% and taxable has declined from 44% to 22%.

The nice to have problem is that my tax-deferred investments have done well so it has been hard to reduce tax-deferred amounts.

 

[PatrickA5]

77% Tax Deferred 23% Tax Free. Our taxable money is small and will be gone by the time DW retires and we start our SS. I would like to get that closer to 60/40 or even 50/50 in order to give us more "options" going forward, but we really don't have a lot of room in the 12% bracket while she's working and I'm hesitant to do any more 22% conversions (see other thread).

 

[Niuatoputapu]

81% Tax-deferred, 16% Roth, 3% Taxable. Currently spending the tax-deferred and converting tIRAs into Roths within the 22% bracket.

 

[Ed_The_Gypsy]

I made a mistake in the poll. I forgot to include my wife's Roth.


We have 9.7% in tax-deferred tIRA, 90.3% in tax-free Roths.


RMDs plus my small pensions are small enough that we pay no income tax. I could make another $11,000 a year and still not pay tax. We managed this finally by installing 9kW of solar panels last year and used the 30% tax credit to convert a sufficient amount of tIRA to Roth. And we are safe from the Tax Torpedo.


We waited to claim to maximize SS. We can live off SS if necessary. We are taking distribution of less than 4% of our financial assets per annum, so it looks sustainable. Our AA is roughly 70/30.


I think we are OK.

 

[gcgang]

Another good question to ask is how much of your taxable account is cap gains?

Good point. There's a big difference between $1mm cash and $1mm in an IRA, although many here do a great job to minimize loss due to taxes.

If I cashed everything in at once, I'd probably lose 35% of my Net Worth to State and Federal Income Taxes. But like that great tax dodger Warren Buffet, I'll never pay tax on my deferred gains, and have plans to stretch the IRA to my descendant. That is, unless we get some major tax overhauls.